Intel’s turnaround to pay off next year

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amd will allegedly continue to be strong this year while intel's investment and restructuring efforts will pay off next year. though amd's stock prices have dropped 40% since march in light of investor fear that sharp and dramatic price cuts from intel following core 2's release would harm amd's gain in marketshare, amd has actually weathered the storm without incident, even gaining marketshare. as such, the rosey outlook is for a positive remainder of this fiscal year.

intel, meanwhile, is seen as less and less of the alluring giant it once was, or so it seems. many are reportedly seeking an alternate solution to intel, and that is at least one explanation for the rise in amd sales, increasing marketshare to 27% (up from 18% one year earlier), according to mercury research.

at the same time amd is making inroads, intel's expected to have 55% less profits this quarter, down to a meager us$1 billion. [sarcasm]oh, it must be terrible to only be profiting a billion dollars per quarter. i honestly don't know how the company can afford to pay its employees on such horrendous net profits![/sarcasm] puh-lease! i do not understand how companies can berate an organization for only making a billion dollars in profit per quarter. if i made a billion dollars in profit in a quarter, well, i would only have to work about one hour that quarter to set myself up for life given my current dreams and ambitions (to be an organic farmer–no kidding). profiting one billion per quarter equates to about half a million dollars per hour, assuming 24 hour work days. lower that to 8 hour work days and you're up to $1.5 million per hour. and that's profit, not revenue. that's how much money over and above all expenses you're making. per hour. every hour. … oh well.

read more about the trend forecast from a reuters article at information week, and post your comments below using our lovely new registered comment system whereby your post has an actual chance of being read (through all of what would otherwise be noise).

user comments 24 comment(s)

not so fast…(10:37am est tue oct 17 2006)i don't think amd has seen the full effect of the storm yet – there are still very limited offerings with respect to motherboards for the core 2 duo chips. from what i have seen, performance is better on a performance per dollar basis for the core 2 dou so i think the real storm is next year once intel gets its act together and the core 2 duo is fully supported and there is a reason to upgrade (vista with aero). – by ip_student

storm(10:58am est tue oct 17 2006)ip, from what i have been reading online ect, there is an improvment in terms of core 2 motherboards being avaiable. but i do agree with you that amd has not seen the full effect of the storm yet. wait until early next year with intel's quad core. the core 2 duo and extreme will look like child's play compared to what intel has in store. amd is desperate why else doyou think they bought ati! – by alan

numbers…..(12:38pm est tue oct 17 2006)so lets look at last years numbers and well in december this year this years numbers will be release for both.

so if you look at the numbers well intel is the man across the board. now lets look at what most likely be released for numbers in ~2 months…

amd will be posting about 5 billion more in debt, they will be posting near no profit due ati's brilliant profits (sarcasim) and their own price drops in by 60%+ for cpu's while outsourcing this mfg to charter, even lowering their profits.

it is amazing that amd will actually be posting up probably in the range of double to almost triple the long term debt with its recent moves.

if profits do not pick up soon for amd their debt will start to drag down future moves to try and get more market share. if they do not pick up there will be a huge change in the management of amd. this change will most likely refocus the company, splitting off divisions of the company that are not near the core ideals…sorry to say but this often happens that the company takes on huge debt to move into different markets and soons after a couple years they are re-spinning off the same division they bought a couple of years before to refocus the company and increase profits.

o well i know rick will never admit that amd is in a world of hurt in th – by asdfasdfasd

$1 billion profit has quite a bit of a different meaning to a would-be dirt farmer than it does to a company with a market-cap the size of intels. geeze, this isn't mom and pops grocery store, it is a huge corporation and it requires such large profits for its owners. – by cynic

cynic(12:53pm est tue oct 17 2006)

i think you missed my point.

– by rickgeek

asdfasdfasdf(12:58pm est tue oct 17 2006)

i will admit that amd has significantly less cash, revenue, profit and diversity comapred to intel. but i will never admit they are in a world of hurt because companies are successful all of the time on a shoestring budget. plus, people want amd processors. they provide a better value for the performance they deliver in various market segments. and so long as amd is not losing money, or too much money, they will continue on as long as they need to.

having deep wallets isn't everything. in fact, more often than not it is exactly a sign of brutal complacency, as was exhibited in intel since before 2000 all the way through core 2's release.

think about how much more a “world of hurt” amd was in before they released athlon. and look where they are now. the only difference between now and then is they have a lot more money now, more fab capacity, more partnerships, more partners, more respect, more products, more historical success and a better received product on the market overall.

27% of the worldwide pc market, up 9% from the same time last year. they're growing, not dying. they may not continue to grow at that pace (likely won't), but they are release a true quad-core mid-2007 that will compete with anything intel has.

we'll see what comes over time. personally and honestly, i really don't care as much as people think i do. it's just something to talk about and discuss while you're not doing more important stuff, like spending time with your family or your kids your extended family.

there's more to life than always been a geek, even for geeks, and even at geek.com.

– by rickgeek

registered!(1:28pm est tue oct 17 2006)hello, fellow goatgeeks…

sir ricksalot ~ maybe it escaped the majority of geeks, but the photomicrograph of newest 4-core chip shows…

1. a computational core just about the same size as the dual.2. less per-core l2 cache (512k), but a nice l3 cache betwixt them3. 2-axis reflected layout symmetry of the cores! [big]4. a modestly larger die. 283 sq.mm.

#3 for me is a big “hidden win” for amd. their previous dual-core chip was an obvious 'cut-n-paste' of 2 cores, 2 caches, onto one die with some interconnection logic. by stretching their layout to be symmetric on both the x and y axis reflections, they have significantly abstracted their tools. nominally of course, whether the whole thing is laid out “left handed” or “right handed” should make no difference. in truth, it usually does – by uncovering deep bugs (“shortcomings”) of the layout rules software. going to all 4's symmetry completely validates their axis independence – which will open the way not just to higher-order designs, but incorporating reflected symmetry within each core itself, to save space and tighten up timing on the design.

the other thing to note is at the level of integration of the 4-way processor, it appears that the “computer” part, the execution units that do all that math … is now down to something less than 10% of the overall chip! amazing.

in any event, intel & amd are tracking down parallel development paths: towards heavy parallelism. intel has spec'ed that its future will also carry specialized ultra-parallel processors (per sir rick's observation), and though not stated, they will obviously incorporate them into heterogeneous designs as well.

amd has kept intel honest and competitive, intel has kept amd nimble and aggressive. the perfect “2 party system”

– by goatguy

the storm(1:53pm est tue oct 17 2006)i think that storm is still approaching. when intel has the combination of a budget priced core2duo as well as enthustast montherboards boards in easy supply and bargain priced motherboards hitting the market, that's when amd has to watch out. a sub $150 core2 duo chip combined with a sub $100 motherboard would allow a huge number of people to upgrade for a relatively limited cost.

that reason to upgrade could be anything from a new game to the microsoft refresh cycle.

alan, when the quad's start hitting, i think we'll see a celeron style dual core core2 processor arrive. along with budget motherboards, that could be the perfect storm so to speak. i've yet to see amd really respond to the dual cores from intel. when it was the pentium d range, amd only had premium offerings, now core2 is here and amd has their previous generation at nice prices, but when they go 65nm too, it'll once again be premium amd against budget intel with roughly equivalent performance. which do you think folks will choose? – by highlandcynic

goatguy et al(2:06pm est tue oct 17 2006)intel has laid out a future with many more cores per chip. where do you think they're going with this? looking at the current designs from both amd and intel, it looks to me that with the shrinkage of the actual computational part of the processor and the growth of other areas, especially cache, we are heading towads a sitation where there could be very many small execution units working together from a hierarchy of small local caches and larger shared cache. ibm's cell processor uses some of these ideas also.

with such a processor, and the limits imposed by the width and number of external bus connections, how many 'cores' per chip are practical? could processors become dynamically configurable so that, no matter how many physical execution units or cores there are, the processor presents perhaps 4 or 8 cores to the operating system depending on configuration and load?

what are your thoughts? – by highlandcynic

re: rick(3:16pm est tue oct 17 2006)i will agree with you to a point, but you tend to over look raw numbers and that fact is that amd has had to debt herself out to a point where any large moves in any direction, ie fabs, will be hard get due to lenders being more critical of a company that has 5-7 billion in debt but is only making roughly 165 million for last year. looking at the fallout of the pricing wars and the ati non-profit i dont expect this to be much higher. the problem is the profit to capital or the net profit % which for amd are piss poor.

but we need amd to stick it out for the bettering of both amd and intel – by asdfasdfasd

but i am not sure if there is worse to come for amd. we have seen initels business practices change for the better, we have seen their profits slide.

i was talking to my workmate, who had a chat to someone pretty damn high up in intels offices, that they are getting very badly hurt by amd, and they are in major damage control.

but…

intel is not a small, quick changing company. it's a huge multinational at least the same size as bhp. i tink it will be a while yet, if ever, that intel put out someting technologically advanced (wimax not whistanding)

to the non-geek layman, me, it appears the timing of new product releases give each an advantage for: 6 months? a year? then the other reponds with a better product. does make for fun and lively discussion, though.

but seriously… i agree with marketman, lets hope amd come back with something new inoder to preserve goatguy's perfect 2 party system. – by davethejackal

asdfasdfasdf(8:11pm est tue oct 17 2006)

“i will agree with you to a point, but you tend to over look raw numbers and that fact is that amd has had to debt herself out to a point where any large moves in any direction…”

the thing people don't realize is this debt has not been in vain. in fact, the profit potential of their fab 36 debt has been realized in the form of a deal with dell. that has pushed their worldwide marketshare to 27% of the x86 pc market. even more than that, the realization of additional profit potential from investment (not just “debt”, but “investment”) in the future can be viewed as a good thing.

we have been reading more and more about so many semiconductor companies going fabless. to have a fab in this day and age, and one running at 65nm is quite a feat and something that will profit, provided it's done correctly. and with amd's advanced process manufacturing technology (which they developed) they obviously (as goatguy points out) have a great deal of flexibility in implementation.

amd is doing it right, as the record has shown. if they continue on there will be many who will buy amd simply because they're not intel, or simply because they want a better value, or simply because they want a longer upgrade cycle for their motherboard investment, or simply because they like hypertransport and the future platform amd will be offering which allows direct ht connection with other (non-cpu) devices via ht links and/or physical placement in an amd socket.

there are a lot of reasons to choose amd for a future platform. not all of them stem from their financial outlook, but rather from utility and mobility. how quickly can you get from a-z given the flexible platform solution built around an open-source solution like hypertransport, as well as an ever-opening chipset implementation thanks to the on-die memory controller and multiple hypertransport links.

shared technology and partnerships really is the way to go. you get more ideas, more interests, more focuses all working together toward and end rather than a single company's visionary source, no matter how wide-sweeping and well-meaning that visionary source might be from the single company. it will always be less (due to financial interests in given, diverse areas) than it would be from multiple, independent entities working together.

wasn't there a movie in recent years about this very concept in economy and production? was it called “a beautiful mind”?

– by rickgeek

rickgeek(1:30am est wed oct 18 2006)rick, ca you please provide me concrete evidence that amd, in fact better value ? because from what i have seen for the very low end cpu's, this may be the case but for a majority of end users, we tend to use the middle ranger and from what i have seen in the middle range is pretty comparable dollar wize , so who would pay the same amount in that range for a lower performing amd??i sure as heck would not. in terms of the high ranger that is so the opposite because athlon fx is still a ton more money compared to an intels lower end cpu which is managing to top amd's best offerings….so please prove to me where there is better value in amd? because i fail to see that at all , with the exception of the celeron . – by alan

alan(4:52pm est wed oct 18 2006)

go to this story:http[colon slash slash]www[dot]anandtech[dot]com/guides/showdoc[dot]aspx?i=2839

jarrad makes references to intel being faster at virtually every price point, but not all of them. he also states that with amd systems you have more motherboard options and choices. this will undoubtedly change over time as core 2 matures and more embrace it's better performance.

alan, you remind me of someone. your real name isn't dean, is it?

there is value beyond performance in microprocessors. i put my money where i believe it should go. i will not buy intel, even with its large core 2 advantage, because i don't believe in or support what intel has done for many years. they tried to force itanium on us for the 64-bit path, not the amd64 solution which has now won out by even their own admission. they tried to force netburst on us, and then later realized how wrong they were. they have used brute force methods to maintain marketshare and profitibility.

all of those factors run completely against my grain. and simply because they happen to have the faster processor right now, well that is absolutely *no* reason to buy any of their equipment when there are nearly as fast, equally (if not more so) viable alternatives (in terms of track record, motherboard support, motherboard options, etc.).

intel isn't all that. they are a viscious company and i'll have no part in them. i place value not only in performance, but also in ethics and corporate direction. i like the fact that amd is going wide with partnerships. that means many more will be embracing and guiding their policy. the market will speak much more clearly to them than it will or would intel.

ethics. morals. values. these above all else. period.

– by rickgeek

rickgeek(5:04pm est wed oct 18 2006)i can say with 100% fact, that i am not dean. because i am transgendered, thus a bio female:)

secondly, i wish you would direct your so called high principles towards how you treat others. i recall a time when you viciously attacked me for no reason whatsoever. yet you refuse to buy a chip produced by a compnay that you percieve is vicious???really intresting there big boy. – by alan

not 2 mention(5:14pm est wed oct 18 2006)oh yes rick, big bad intel , the evil corporate snake….gee is that why they are investing 1 billion dollars to less fortunate countires???must be so vicious of them to want to help out the poor and not so privilaged people. how terrible . how dare they do that…..it could be very easily arguened how vicious amd has been. slandering intel, boasting and bragging , pursuing a stupid lawsuit, aquiring ati which if intel had done would have been perceived as monopolistic behaviour but it is okay for amd to do it. yup amd is a saint ! give me a breakhttp://www.intel.com/intel/worldahead/index3.htm– by alan

teach program(5:47pm est wed oct 18 2006)rick, also , not to mention the teach program from intel. how vicious of them to donate more then 100 thousand computers to millions and millions and millions of teachers across the world. training teachers to teach thier students (our children) how to become productive members of scociety and to reach for thier dreams and achive a high level of education at no cost to the school or teachers. how terrible intel is to do that for childre. how vicious. i do not see amd doing any of this with thier money. mind you they do not have near as much as intel, but they woudl rather persue a vicious lawsuit then to contribute to scociety . how terrible of intel to want to help out people in the world , they are evil evil evil for doing that. shame on intel . you are a joke rick – by alan

test(1:36am est thu oct 19 2006)test – by alan

i can go on(4:39am est thu oct 19 2006)i can point out other points rick if i need to – by alan

intel/amd windows/linux(10:54am est thu oct 19 2006)rick what os do you run? windows? (i'm not here enough so i don't know) hope not because if you are running windows then your argument against intel holds no water.

personally i go where the best performance for my money is. c2d hands down, i was on an a64 3700 before this proc. next year we'll see but i think even amd's k8l is going to have a rough go agains intels quad cores on a 45nm process. my opinion. – by rottengeek

amd's problem in technology and manufacturing(10:05pm est fri oct 20 2006)amd does not have a process technology problem per se. it goes into 65 nm at a later time than intel, but it has the newer, better tools. in fact, its 65 nm has the capability to shrink chips to the same level as intel's 45 nm process in 2007. the problem has always been that its chips are larger area as a result of the design. perhaps it is because its cache takes up a smaller fraction, or it needs to have a higher fraction of high-performance transistors, but anyway the resulting larger chip size adds to the manufacturing cost. coupled with the lower volume than intel, it is hard to recoup the cost, especially for new fab equipment.

the only way in the short term for a player like amd to catch up is to make the design more competitive from a manufacturing cost point of view. – by fdc